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Tag: Punjab National Bank shares

  • After purple flags, PNB Housing Finance calls off its Rs 4,000-crore Carlyle deal

    THE controversial transfer by US-based Carlyle group, together with former MD of HDFC Bank and a senior advisor at Carlyle Aditya Puri, to amass a stake in PNB Housing Finance has come to an finish with the board of the house mortgage firm deciding to not proceed with the preferential subject.
    As The Indian Express had reported in June, this transaction had been red-flagged by minority shareholders and the hyperlinks of many PNBHF board members to Carlyle had raised questions of battle of curiosity.
    PNB Housing has terminated the share subscription agreements executed with Pluto Investments, an affiliated entity of Carlyle Asia Partners IV, and Carlyle Asia Partners V, which entailed an funding of Rs 3,185 crore.
    “We have been informed that consequently Pluto Investments (together with persons acting in concert) will be initiating the process to withdraw the open offer made by them at Rs 403.22 per share,” PNB Housing stated in an trade submitting.
    The subject, if it had gone by way of, would have made the US-based non-public fairness big a majority shareholder within the firm — taking its share from 32% to 50.1% — and introduced down the stake of Punjab National Bank in its housing finance subsidiary from 32.6% to twenty.3%.
    On June 8, The Indian Express had reported how a number one proxy advisory agency, Stakeholders’ Empowerment Services, on the behest of minority shareholders, had red-flagged the proposed transaction.
    On the pricing of the choice share at Rs 390, PNBHF, the agency’s report stated, ignored its Articles of Association, which requires the value to be “determined by the valuation of a registered valuer.”

    On June 14, The Indian Express had reported that of the 12 PNBHF board members who cleared the allotment, not less than seven had handled the US PE big — together with two Carlyle workers who’re nominee administrators.
    On Thursday, the PNB Housing board “noted that due to the protracted litigation and the continuing interim order of the SAT dated June 21, 2021, there is no clarity on the shareholders’ approval for undertaking the preferential issue”.
    In addition, regulatory approvals required for the preferential subject, are pending and it’s unclear whether or not such approvals shall be forthcoming whereas the authorized proceedings are ongoing, the corporate stated.
    “The company’s capital raising plans will be further delayed and such uncertainty will continue. The board’s primary objective is to raise capital to support the growth of the company, and the board believes that the current situation is not in the best interests of the company and its stakeholders,” PNB Housing stated.
    The proposed preferential subject has been held up for greater than 4 months — after already having taken over two years — on account of pending authorized proceedings earlier than the Securities Appellate Tribunal.
    On June 18, 2021 capital markets regulator Sebi issued a letter to PNB Housing and directed that the decision regarding “issue of securities of the company” within the EGM discover dated May 31, is “ultra-vires” of the corporate’s Articles of Association and it shouldn’t be acted upon till the corporate undertakes the valuation of shares — as prescribed in its AoA – by an unbiased registered valuer.
    While the corporate filed an enchantment with SAT, the appellate authority handed an interim order on June 21.

    In its order, although the Tribunal gave its nod to PNB Housing Finance to carry its extraordinary common assembly for shareholder approval of the Rs 4,000-crore share allotment to a clutch of traders led by Carlyle Group, it directed the corporate to not declare the outcomes of voting that was to be held on June 22, till additional orders from the tribunal.
    On August 9, a cut up verdict was introduced, during which the Presiding Member of SAT issued an order in favour of the corporate and put aside the Sebi letter dated June 18, whereas the Judicial Member’s order upheld the Sebi letter.
    Further, SAT ordered that the interim order dated June 21, 2021 was to proceed till additional orders of SAT.
    Meanwhile, Sebi most well-liked an enchantment towards the order of the Presiding Member of SAT earlier than the Supreme Court, which is presently pending. “There continues to be no visibility or certainty as to the timeline for judicial determination of the legal issues, in particular as a third member of the SAT is yet to be appointed,” PNB Housing stated.

  • CCI clears PNB Housing Finance take care of Carlyle

    The Competition Commission of India (CCI) has accorded “deemed approval” to a proposal of Carlyle-backed Pluto Investments and Salisbury Investments to choose up a majority stake in PNB Housing Finance (PNBHF), even because the Securities Appellate Tribunal (SAT) is but to ship its judgment on the deal.
    In a discover reviewed by FE, the CCI stated: “The proposed combination involves Pluto and Salisbury acquiring up to approximately 56.29 per cent (assuming full tendering and acceptance in the mandatory open offer) and approximately 0.24 per cent of the post-preferential allotment equity share capital of PNBHF.”
    While the deal worth isn’t talked about within the discover, PNBHF board had earlier accepted a proposal to lift as much as Rs 4,000 crore by issuing fairness shares and convertible warrants to entities led by Carlyle group companies. In an announcement, the Corporate Affairs Ministry stated the CCI obtained a discover on the deal underneath the “Green Channel”. —FE

  • Shares up submit Carlyle deal, high PNB Housing execs offered off ESOPs

    THE controversial Rs 4,000-crore share allotment by PNB Housing Finance to a clutch of traders led by The Carlyle Group has prompted questions from the market regulator. But as PNBHF’s share worth doubled following the May 31 announcement, information analysed by The Indian Express present that senior executives of the corporate, in management roles, rushed to monetise a hefty chunk of their worker inventory choices (ESOPs).
    In reality, between June 2 and June 22, at the least 23 senior executives of the corporate offered their shares value an combination of over Rs 13 crore.
    The high 5 by variety of ESOPs offered: Nitant Desai, Chief Technology Officer who offered 35,982 shares (99.2% of his ESOP holding); Manoj Kumar, head of North and East (17,462 shares, 76.6%); zonal assortment supervisor Sushant Kumar (13,000 shares, 100%); Pankaj Jain, zonal head, south (12,700 shares, 47.8%); and Rajan Suri, enterprise head (12,140 shares, 64.3%).
    They offered their shares after June 9 when its common worth was at a file excessive of over Rs 700 – virtually twice that of their common acquisition worth.
    A scrutiny of the corporate’s disclosures exhibits that after the surge, whereas seven staff offered their whole ESOP holding as on date, most of them offered greater than half of their shareholding.
    In, at the least, three instances. staff acquired the ESOPs (vested to them) on June 10 and offered a big a part of it by June 17. The acquisition of the share was at a pre-determined worth of Rs 338 per share.
    These trades are throughout the regulatory framework of Sebi’s Insider Trading Regulations as they have been performed 48 hours after the board announcement on May 31.

    Market consultants attribute the sale to 2 elements: one, the sharp rise within the share worth and, two, the controversy over the PNBHF board’s allotment which is now the topic of a Sebi discover.
    Indeed, information exhibits that of the full share sale by staff value Rs 13 crore, shares value over Rs 12 crore have been offered by these staff after June 7.
    Significantly, it was on June 7, that proxy advisory agency Stakeholders’ Empowerment Services (SES), on the behest of minority shareholders, launched its report alleging that the PNBHF board decision on the preferential subject was “(an) unfair transaction, against public shareholders and PNB”.
    On the pricing of the choice share at Rs 390, PNBHF, the report stated, ignored its Articles of Association which referred to as for the worth to be “determined by the valuation of a registered valuer”.
    While a share of PNB Housing Finance closed at Rs 437.7 on May 28, it jumped to Rs 525 on May 31 and closed at Rs 880 on June 7 — doubling in six buying and selling classes.
    Responding to queries mailed by The Indian Express, the corporate stated, “These transactions were in compliance with Insider Trading Policy of the Company. The Company has informed the stock exchange on May 25, 2021 about holding of board meeting to consider fund raising…As per SEBI (Prohibition of insider trading) Regulation of 2015 and the Insider Trading Policy of the Company, the trading window for dealing in securities of the Company was closed from May 26, 2021 up till June 2, 2021 for the designated employees of the Company. Post opening of trading window, some of the employees have exercised their right to transact shares of the Company permitted as per Insider Trading Policy of the Company. The Company has reported transactions of employees to stock exchanges. The capital raise proposal and its contents were in public domain, refer our communication dated May 31, 2021, to the stock exchanges.”

    On June 18, 2021, Securities and Exchange Board of India issued a letter to PNBHF that the decision regarding “issue of securities of the company” within the EGM discover dated May 31, is “ultra-vires” of the corporate’s Articles of Association and it shouldn’t be acted upon till the corporate undertakes the valuation of shares — as prescribed in its AoA – by an unbiased registered valuer.
    The firm moved the Securities Appellate Tribunal on Monday (June 21) and bought the go-ahead for the its EGM that was held the subsequent day. The Tribunal nonetheless, directed the corporate to not declare the outcomes of the voting.

  • Shares up put up Carlyle deal, high PNB Housing execs offered off ESOPs

    The controversial Rs 4,000-crore share allotment by PNB Housing Finance to a clutch of traders led by The Carlyle Group has prompted questions from the market regulator. But as PNBHF’s share value doubled following the May 31 announcement, data analysed by The Indian Express present that senior executives of the corporate, in management roles, rushed to monetise a hefty chunk of their worker inventory choices (ESOPs).
    In truth, between June 2 and June 22, not less than 23 senior executives of the corporate offered their shares price an mixture of over Rs 13 crore.
    The high 5 by variety of ESOPs offered: Nitant Desai, Chief Technology Officer who offered 35,982 shares (99.2% of his ESOP holding); Manoj Kumar, head of North and East (17,462 shares, 76.6%); zonal assortment supervisor Sushant Kumar (13,000 shares, 100%); Pankaj Jain, zonal head, south (12,700 shares, 47.8%); and Rajan Suri, enterprise head (12,140 shares, 64.3%).
    They offered their shares after June 9 when its common worth was at a document excessive of over Rs 700 – virtually twice that of their common acquisition value.

    A scrutiny of the corporate’s disclosures exhibits that after the surge, whereas seven workers offered their total ESOP holding as on date, most of them offered greater than half of their shareholding.
    In, not less than, three instances. workers acquired the ESOPs (vested to them) on June 10 and offered a big a part of it by June 17. The acquisition of the share was at a pre-determined value of Rs 338 per share.
    These trades are inside the regulatory framework of Sebi’s Insider Trading Regulations as they have been performed 48 hours after the board announcement on May 31.

    Market consultants attribute the sale to 2 components: one, the sharp rise within the share value and, two, the controversy over the PNBHF board’s allotment which is now the topic of a Sebi discover.
    Indeed, information exhibits that of the entire share sale by workers price Rs 13 crore, shares price over Rs 12 crore have been offered by these workers after June 7.
    Significantly, it was on June 7, that proxy advisory agency Stakeholders’ Empowerment Services (SES), on the behest of minority shareholders, launched its report alleging that the PNBHF board decision on the preferential difficulty was “(an) unfair transaction, against public shareholders and PNB”.
    On the pricing of the choice share at Rs 390, PNBHF, the report stated, ignored its Articles of Association which known as for the value to be “determined by the valuation of a registered valuer”.
    While a share of PNB Housing Finance closed at Rs 437.7 on May 28, it jumped to Rs 525 on May 31 and closed at Rs 880 on June 7 — doubling in six buying and selling periods.
    Responding to queries mailed by The Indian Express, the corporate stated, “These transactions were in compliance with Insider Trading Policy of the Company. The Company has informed the stock exchange on May 25, 2021 about holding of board meeting to consider fund raising…As per SEBI (Prohibition of insider trading) Regulation of 2015 and the Insider Trading Policy of the Company, the trading window for dealing in securities of the Company was closed from May 26, 2021 up till June 2, 2021 for the designated employees of the Company. Post opening of trading window, some of the employees have exercised their right to transact shares of the Company permitted as per Insider Trading Policy of the Company. The Company has reported transactions of employees to stock exchanges. The capital raise proposal and its contents were in public domain, refer our communication dated May 31, 2021, to the stock exchanges.”

    On June 18, 2021, Securities and Exchange Board of India issued a letter to PNBHF that the decision referring to “issue of securities of the company” within the EGM discover dated May 31, is “ultra-vires” of the corporate’s Articles of Association and it shouldn’t be acted upon till the corporate undertakes the valuation of shares — as prescribed in its AoA – by an unbiased registered valuer.
    The firm moved the Securities Appellate Tribunal on Monday (June 21) and obtained the go-ahead for the its EGM that was held the following day. The Tribunal nevertheless, directed the corporate to not declare the outcomes of the voting.

  • Conflict of curiosity: PNB Housing board that cleared majority stake for Carlyle has hyperlinks with Carlyle

    RAISING questions of company governance and battle of curiosity, a majority of the board members of PNB Housing Finance Limited that determined to situation shares value Rs 4,000 crore to buyers led by US personal fairness big The Carlyle Group, have hyperlinks to Carlyle.
    Former HDFC Bank MD Aditya Puri, who has joined Carlyle as senior advisor, may even be issued shares.
    The board’s transfer to situation shares, as reported by The Indian Express, might scale back the stakeholding of Punjab and National Bank in its housing finance subsidiary to beneath 26 per cent — a reversal of its personal acknowledged public dedication.
    Of the 12 members, two are Carlyle workers and are nominee administrators by advantage of the agency having a 32 per cent stake within the firm — Sunil Kaul and Kapil Modi. After the share allotment, it will go as much as over 50 per cent.
    Five others on the board have a Carlyle hyperlink. Consider:
    * Hardayal Prasad, MD & CEO of PNBHF since August 2020: In July 2020, Prasad took voluntary retirement as MD and CEO of SBI Cards and inside a month joined PNB Housing as its MD & CEO. In March 2020, Prasad was behind SBI Cards’s Rs 9,500-crore public situation wherein Carlyle supplied 9.3 crore shares (out of 24.24 crore shares it held) elevating over Rs 7,000 crore by means of its supply.

    Carlyle had acquired a 26 per cent stake in SBI Card from GE Capital in December 2017 for round Rs 2,000 crore and made an enormous revenue in lower than three years.
    Prasad was appointed MD and CEO of SBI Cards in February 2018. Just 4 months after the IPO, he took VRS, stop SBI Cards and joined PNBHF. While his remuneration in SBI Cards was Rs 66 lakh for 2018-19, PNB Housing employed him at a set wage of Rs 1.91 crore and a efficiency linked variable pay of Rs 1.4 crore. The board determined to pay a minimal of Rs 1.12 crore of variable pay for the primary yr. Prasad was additionally granted 5.5 lakh ESOP on the then market worth.
    * Neeraj Madan Vyas, non-independent director since September 1, 2020: Vyas was an unbiased director on the Board of PNBHF from April 19, 2019 to April 27, 2020 — and MD & CEO of PNB Housing Finance Limited from April 28, 2020 to August 10, 2020.
    Vyas superannuated as Deputy MD and COO of SBI in June 2018. Negotiations for GE’s stake sale in SBI Cards went on when he had total management of SBI Cards. And when Carlyle accomplished GE’s stake buy in December 2017, Vyas was Deputy MD, SBI Corp. Central Mumbai, and was on the board of SBI Cards.
    * Chandrasekaran Ramakrishan, unbiased director since 2015: He retired as govt vice chairman of Cognizant India in March 2019. He first joined the board of PNBHF in October 2015 and was reappointed in October 2020. In 2016-17, when Carlyle bid for GE’s stake in SBI Cards, Cognizant was the technical companion of Carlyle within the bid and Chandrasekaran was vice chairman of Cognizant.
    * Nilesh S Vikamsey, unbiased director since April 2016: A chartered accountant by occupation and previous president of ICAI, he’s a senior companion in Khimji Kunverji & Co. He joined the PNBHF board in April 2016 and was reappointed in April 2021.
    RoC data present Vikamsey was additionally a director in SBI Cards between August 2019 and November 2020. Of the ten corporations the place he has been a director, there are at the very least six the place Carlyle has been an investor together with PNB Housing, SBI Cards and SBI Life. Vikamsey is on the boards of three IIFL Group corporations the place Carlyle was an investor.
    * T M Bhasin, unbiased director since April 2020: He’s additionally an unbiased director on the board of SBI Cards and SBI Life the place Carlyle is an investor. He is ex-CMD of Indian Overseas Bank and an ex- Vigilance Commissioner.
    Detailed questions despatched to Neeraj Mohan Vyas, R Chandrasekaran, Nilesh Vikamsey, TM Bhasin, Carlyle and PNB didn’t elicit any response.
    Responding to questions mailed to Prasad, a PNBHF spokesperson instructed The Indian Express: “The Company followed due process for the hiring of the MD & CEO. The Company hired a reputed consultant for search of suitable candidate and the final candidate was approved by the Board.”
    Asked concerning the battle of curiosity in a number of administrators having linkages with Carlyle and SBI, the corporate mentioned, “All directors of the company are obliged to periodically disclose all their ongoing engagements within the company as strictly mandated against laid out compliance norms under the law. The Company received all necessary general disclosures from its directors, including independent directors and do not see any conflict.”

    The presence of board members in corporations with a standard investor places a query mark on their independence and, subsequently, raises problems with company governance, a company governance knowledgeable mentioned.
    Incidentally, Vyas’s hyperlink to Carlyle was flagged on the PNBHF board assembly on August 6, 2020 known as to debate Vyas’s appointment.
    Fellow director Gourav Vallabh known as it a “perceived conflict of interest” that went “against the foundations of corporate governance”. But his objections have been ignored and Vyas was appointed. Vallabh additionally raised related objections to Prasad’s appointment as MD and CEO. When contacted, Vallabh declined to remark.

  • Red flags as PNB stake in housing finance subsidiary might dip under 26%

    QUESTIONS are prone to be raised on the shareholders’ assembly of Punjab National Bank Housing Finance (PNBHF) later this month over the potential for Punjab National Bank (PNB) shedding its dominant shareholder standing within the firm. And into the circumstances of final week’s Rs 4000-crore funding in PNBHF introduced by a consortium of buyers, led by US personal fairness large The Carlyle Group and former HDFC Bank Ltd chief government Aditya Puri.
    The capital infusion will make Carlyle the most important shareholder in PNB Housing. This even if each the federal government and PNBHF publicly dedicated to making sure that PNB maintains a 26% stake.
    Shares of PNBHF have doubled during the last six days at the same time as a report ready by Stakeholders’ Empowerment Services, a number one “proxy advisory firm” to guard minority shareholder pursuits, has known as the PNBHF board decision on preferential situation of fairness shares and warrants to the consortium as “unfair transaction, against public shareholders and PNB”.
    It has additionally known as the transaction “ultra vires” of the Articles of Association.
    The desire share allotment by PNB Housing Finance to Pluto Investments, a Carlyle affiliate (it’s going to subscribe to 80% of the shares issued) and Puri’s Salisbury Investments, together with two different present overseas buyers, will depart PNB with simply 20.3% stake within the housing finance main.
    This means it won’t solely lose its dominant shareholder standing but in addition its veto energy on the board of the corporate. The Carlyle Group will see its stake rising to above 50 per cent.

    On the pricing of the desire share at Rs 390, PNBHF, the report stated, ignored its Articles of Association which requires the worth to be “determined by the valuation of a registered valuer”. Given that the ebook worth of PNBHF share is Rs 540, that will have pegged it at a extra practical degree, consultants stated, because it provides indication of intrinsic worth.
    Instead, the corporate glided by SEBI guidelines on pricing below which it’s primarily based on both 12-week or two-week highs.
    As of now, PNB’s shareholding in PNBHF stands at 32.64% and that of the Quality Investment Holdings (a Carlyle entity) stands at 32.21%.
    However, put up the allotment of shares, PNB’s holding is ready to go down to twenty.3% and that of QIH to twenty%. Together with Pluto’s holding of 30.1%, each Carlyle entities will, collectively, maintain over 50% within the firm.
    A dip in holding under 26 per cent won’t solely weaken PNBs stature on board however will even take away its Veto Power, which sources say can be of concern to the federal government.
    In 2019-20, when PNBHF was seeking to increase capital, the federal government had maintained that PNB’s shareholding shouldn’t go under 26%.The promoter, PNB, additionally appears to have gone again on its dedication of holding a minimum of 26% stake in PNBHF.
    In a press release on January 23, 2020, PNBHF stated, “PNB will maintain a minimum shareholding in PNB Housing at 26%. Further, PNB has confirmed that its stated objective is to continue to hold a minimum 26% shareholding in the Company and continue to be the promoter of the Company.”

    Asked about dilution of PNB’s stake and pricing of the share, PNBHF stated: “As a responsible company, PNB HFC has consistently striven for sound business practices along with excellent corporate governance…..This deal for capital raising has been arrived at with appropriate due diligence keeping best interests of all stakeholders in mind. We are confident this will take the company forward to its deserving success and growth and expected to unlock value for all the stakeholders including minority and retail investors.”
    Emails despatched to Punjab National Bank and The Carlyle Group went unanswered.